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UPDATE 1-Poland's PGNiG confirms interest in gas transit via Baltic Pipe
October 31, 2017 / 5:30 PM / in 25 days

UPDATE 1-Poland's PGNiG confirms interest in gas transit via Baltic Pipe

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WARSAW, Oct 31 (Reuters) - Poland’s state-run gas firm PGNiG said on Tuesday it has submitted an 8.1 billion zloty ($2.2 bln) binding offer to book capacity on the country’s planned gas link to Norway.

The Baltic Pipe, which will run via Denmark, is Poland’s flagship project aimed at reducing reliance on gas supplies from Russia.

PGNiG said its offer was to use the capacity for a 15-year period from 2022 when the pipeline is expected to open.

The company, which buys most of its gas from Russia’s Gazprom, did not say how of the pipeline’s capacity it has booked. Previously it has said it would book almost all of the Baltic Pipe’s expected annual capacity of 10 billion cubic metres.

An investment decision will be made next year on whether to go ahead and build the pipeline.

PGNiG’s bid was submitted as part of the so-called Open Season, a market survey by Polish and Danish gas system operators Gaz-System and Energinet.dk to help confirm the extent of gas demand and the required capacity for the Baltic Pipe.

“Based on the positive result of the Open Season 2017, both Energinet and Gaz-System will continue their project activities in order to be able to deliver the first gas in 2022 if a positive investment decision is taken in 2018,” Energinet said in a statement.

The gas operators have not said whether companies other than PGNiG are interested in gas flows via the pipeline.

In June, Gaz-System and Energinet.dk said total capital spending on the project would be 1.6 billion-2.1 billion euros, while the part to be covered just by Gaz-System was estimated at between 841 million euros and 1.1 billion euros.

Poland’s ruling conservative Law and Justice party (PiS) revived the plan for the pipeline, which dates back to 2001, in 2015 and said it was a top priority, but critics say it may not materialise since it will be not be profitable.

The Baltic Pipe’s capacity is expected at 10 billion cubic metres a year, compared to annual gas consumption in Poland at around 16 bcm and around 2.5 bcm in Denmark.

Final capacity agreements are expected to be signed by the end of January, after more studies on the project. ($1 = 3.6423 zlotys) (Reporting by Agnieszka Barteczko; Additional reporting by Stine Jacobsen in Copenhagen; Editing by Susan Fenton)

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